Defense: Global Trade Management Challenges & Solutions

The defense industry produces products designed to maintain the security of the United States and its allies. It consists of contractors that provide products and services to the government as well as manufacturers that produce military aircraft, missiles and other armament.

Defense industry firms face the challenge of not allowing certain technologies to get in the hands of those that might use it against the interests of the United States. While denied party screening is vital in all areas of importing and exporting, it is especially important in this industry sector. So, too, is export licensing. Of course, these firms seek to be as competitive as possible when it comes to productions costs, too. Global trade management software is essential to manage processes – logistics, regulatory, financial – and enhance collaboration among supply chain partners, so goods can reach their destination in a timely, secure and cost-effective manner.

Serra must keep abreast of diverse worldwide import/export laws on a country-by-country basis to move goods quickly and compliantly. The firm also must track every shipment from door to door to ensure timely delivery and to provide status information on demand.

Serra’s specialization in shipping export-controlled products added another level of complexity to its business processes. The firm had to classify products correctly, apply for export licenses and comply with stringent U.S. and foreign government documentation requirements. License tracking necessitated maintaining running totals of the value of goods exported to date, as each license is associated with a discrete annual dollar limit. Serra also needed to track against each license using multiple numbering schema because each supply chain member uses a different numbering system (e.g., contract number, purchase order number, U.S. DOD part number, foreign entity part number, etc.). The U.S. Government scrutinizes all export documents for completeness and correctness, and the penalties for noncompliance can be severe.

Serra also faced several operational challenges. Previous attempts to migrate to new operational software had failed. Moreover, staff could only access the system on-site, which created problems when the need to work from a remote location arose. Manually tracking shipment status information created the biggest problem of all: Data were not real-time, because staff had to await receipt of documentation and key that information into the system. Worse still, clients could only obtain status updates by calling Serra staff, which meant personnel were continually fielding client requests and doing research that took them away from more productive pursuits. Clients in other time zones faced even greater difficulty in obtaining timely information. From a competitive stance, not being able to offer a track-and-trace service via the Internet was a major disadvantage.

Vincent DiPilato, Serra CIO and Compliance Officer, commented, “Serra had to find a way to do more with less. We needed an integrated automated system that could accommodate our unique business needs across all operating locations, automate processes and allow remote access for staff and customers alike.”

DiPilato says, “TradeMasterQW is the most advanced software application available for importing and exporting. It alone possesses a native SQL database, and it is the only web-based system capable of handling every aspect of our business—importing, exporting, Customs brokerage, freight forwarding, accounting and warehousing. Other vendors claim to be web based or ‘do it all,’ but they hide behind portals and interface with other older systems. QuestaWeb’s web-native software applications are fully integrated modules that meet all our business needs.”

Results

The solution went live in December 2007 and, according to DiPilato, TradeMasterQW satisfied virtually all the firm’s operational needs out of the box. Because the software is installed on Serra’s server behind its firewall, all office locations came online quickly and securely. Staff immediately gained the ability to work remotely from any location with Internet access. TradeMasterQW automated labor-intensive tasks, automatically pre-classifying products, pre-screening supply chain participants, determining supporting documentation requirements, populating forms, storing documents and issuing alerts if key information is missing. Moreover, QuestaWeb’s status as an ABI-certified vendor receiving real-time updates directly from U.S. Customs eliminates this staff task and assures Serra that it possesses the latest information available. DiPilato projects that through automation each staff member can process at least three extra shipments per day. “Over the course of one week, the extra work one person can accomplish covers our system maintenance costs for an entire month,” he says. “When you multiply that by each staff member, the savings are significant and make us more competitive.”

TradeMaster’sQW Track-and-Trace engine gave Serra’s clients around the world immediate access to the most current shipment status information over the Internet. As DiPilato put it, “Now our customers can access our database. If we get an electronic notice that Customs has released a shipment or if we issue an order to pick up a shipment, the customer can log onto ‘SerraTrac’ 24 hours a day, 7 days a week and view the most current information we possess. The impact on staff workload has been dramatic, reaping more savings and placing Serra on a footing equal to bigger competitors.”

If these results were not remarkable enough, DiPilato credits TradeMasterQW with improving the firm’s cash flow: “We now can e-mail invoices to clients within the system or make them available on the web. U.S. customers receive invoices three days earlier; for overseas firms it can be a week or more. Such availability eliminates the excuse of not receiving an invoice.”

The flexibility inherent in TradeMasterQW allowed system modifications to meet the highly specialized requirements associated with Serra’s specialty area: shipping controlled materials to foreign governments, military organizations, aerospace firms and others. Screening can be complex, especially when new items, firms or countries are involved. “I estimate we save 15 to 30 minutes per shipment with TradeMaster’s automated screening capability,” says DiPilato.

TradeMasterQW also gives Serra the ability to comply with strict U.S. Department of State regulatory requirements, as well as customer contract requirements. TradeMasterQW easily accommodated input and tracking of multiple numbering schema and automated the process of maintaining a running tally of products shipped under every export license—a process complicated by the multiple numbering systems.

Felix Pekar, Chief Operating Officer, QuestaWeb, says, “Accommodating clients’ special global trade management needs is what QuestaWeb does best. We developed TradeMaster’sQW web-based software from the ground up with the kind of flexibility necessary to be responsive to changing requirements. What we did for Serra International is a perfect example. Better still, every modification made on behalf of one customer brings enhanced functionality that benefits all our customers. Consistent with our business model, we make these features immediately available to all customers at no additional cost.”